ACA requires exchanges to be established in every state by January 1, 2014,
either by the state itself or by the Secretary of Health and Human
Services (HHS). Exchanges will not be insurers, but will provide eligible
individuals and small businesses with access to private health insurance plans.
Generally, the plans offered through the exchanges will provide comprehensive
coverage and meet all ACA market reforms, as applicable.

The new premium credits established under ACA will be advanceable and
refundable, meaning taxpayers need not wait until the end of the tax year
in order to benefit from the credit, and may claim the full credit amount
even if they have little or no federal income tax liability. Although the premium
credits will not be available until 2014, the examples provided in this report
estimate premium credit amounts by income levels and age, if the credits
were available in 2013.

Under ACA, the amount received in premium credits is based on income tax
returns. These amounts are reconciled in the next year and can result in
overpayment of premium credits if income increases, which must be repaid
to the federal government. ACA limited the amount of required repayments.
Since the enactment of ACA, these limits have been amended twice, under P.L.
111-309 and P.L. 112-9.

In addition to premium credits, ACA authorized new cost-sharing subsidies.
Certain premium credit recipients will also be eligible for reductions in
their annual cost-sharing limits. Moreover, certain low-income individuals
will receive additional subsidies in the form of reduced costsharing requirements
(e.g., lower copayments).

Relative affordability of health insurance premiums that individuals and
families might face within health insurance exchanges will likely vary
from exchange to exchange based on a host of factors, including enrollees’
age, the varying prices paid by plans for medical goods and services, the
breadth of the provider network, the provisions regarding how out-of-network
care is paid for (or not), and the use of tools by the plan to reduce
health care utilization (e.g., prior authorization for certain tests).
Examples provided in the Appendix of this report depict a range by which premiums
might reasonably be expected to vary based on enrollees’ age, and variation in
medical costs across geographic areas, for purposes of illustration only.
Actual premiums will likely vary among health insurance exchanges based on
a wide range of factors other than those depicted in this report.

Date of Report: July 31, 2013
Number of Pages: 35Order Number: R41137Price: $29.95

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